Bill Shaikin of the LA Times is reporting that Tom Barrack, an LA-based billionaire real-estate investor, has joined the ever-expanding list of potential bidders for the Dodgers. The team was put into bankruptcy by embattled owner Frank McCourt and has to be sold to somebody by April 30.
Barrack ads some new local flavor to the action. I feel obligated, however, to explain how the various Very Rich Men who are interested in owning the team made their money — and what that could tell us about how they'd run the Dodgers.
I've already tackled how Steven Cohen amassed his hedge-fund billions. Now I'll take a look at Barrack.
At base, the guy does real estate. From the helm of his $34-billion private-equity shop, Colony Capital in Santa Monica, Barrack manages this most debt-intensive of investments. His mojo is to zero in on "distressed" assets — properties that could be worth a lot more than their apparent face value and, being real estate, provide an obvious form of collateral to use for leverage — and, to put it simply, fix them up. This is from a New York Magazine profile of Barrack, a 63-year-old USC grad, that appeared in late 2010:
pvsbond/Flickr (cc by-nc-nd)
The bleachers stand empty at Dodger Stadium in Los Angeles, California.
AirTalk had a great segment today on the many bidders for the Dodgers, currently in bankruptcy, but in need of a buyer from embattled owner Frank McCourt by April 30. Host Larry Mantle was joined by Bill Shaikin of the LA Times and KPCC's own Nick Roman to assess the suitors.
To me, it boils down to money guys versus sports guys, with the recently announced Rick Caruso-Joe Torre partnership as the best of both worlds. That said, McCourt controls the sale, as Shaikin pointed out. And so it may be that the team winds up going to the highest bidder.
I don't think anyone can outbid hedge-fund billionaire Steven Cohen. He has enough money to buy the team two or three times.
But Nick made a strong case for developer know-how. Cohen made his bones on Wall Street as an aggressive trader. He rarely owned anything for more than a few days. In some cases, he probably bought and sold huge numbers of assets in a few hours.
Harry How/Getty Images
Clayton Kershaw and teammates of the Dodgers celebrate a two run homerun of Matt Kemp for a 2-1 win over the St Louis Cardinals at Dodger Stadium on April 17, 2011.
As KPCC's Corey Moore reported yesterday, billionaire hedge fund king Steven Cohen wants to buy the Los Angeles Dodgers. You'll recall that owner Frank McCourt, mired in an acrimonious divorce proceeding and dueling with Major League Baseball Commissioner Bud Selig, put the team into bankruptcy in June. That desperate gambit failed and McCourt has given up the fight. The team now has to find a new owner by April 2012.
Enter Cohen, with an estimated net worth of $8 billion, but more importantly, a reputation as Wall Street's most successful — and controversial — trader. In fact, few men more perfectly represent the ascent of the swashbuckling trader on the Street than Cohen, who started his hedge fund, SAC Capital Advisors, in 1992. It's now worth $12-$14 billion.
With coin like that, Cohen could easily afford to bid for the Dodgers, whose value has been pegged at around $1 billion.